- 40 -
that further investigation was warranted. We further find that
at that time petitioner did not know, and had no reason to know,
within the meaning of section 6013(e)(1)(C) that there was a
substantial understatement in each of those joint returns that
was attributable to the unreported embezzlement income.
Section 6013(e)(1)(D)
In determining whether it is inequitable under section
6013(e)(1)(D) to hold a taxpayer claiming innocent spouse relief
liable for the deficiency attributable to a substantial under-
statement, we must examine all the relevant facts and circum-
stances, including whether the taxpayer claiming innocent spouse
relief received significant benefits as a result of the items
omitted from gross income, whether that taxpayer participated in
any wrongdoing, and whether that taxpayer has since divorced the
culpable spouse. Resser v. Commissioner, 74 F.3d at 1543; see
sec. 1.6013-5(b), Income Tax Regs. In determining whether the
taxpayer received significant benefits from the items omitted
from gross income, normal support, as measured by the taxpayer's
circumstances, is not considered a significant benefit. Resser
v. Commissioner, supra at 1543.
There is no evidence in the record to support a finding that
petitioner and her family received other than normal support
during the years at issue. Petitioner testified, and we found,
that her family expenditures during those years were not lavish
compared to her expenses during years prior to those years.
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